Big US online retailer to accept Bitcoin

Barney Jopson and Stephen Foley

Thursday, 19 Dec 2013 | 8:10 PM ETFinancial Times

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Overstock plans to become the first big U.S. online retailer to accept Bitcoin, as Patrick Byrne, the company's libertarian chief executive, warms to the virtual currency as a refuge from government control.

Mr Byrne told the Financial Times that Overstock planned to start accepting Bitcoin next year – possibly by the end of the second quarter – a decision that he said was driven mainly by his own political philosophy.

"I think a healthy monetary system at the end of the day isn't an upside down pyramid based on the whim of a government official, but is based on something that they can't control," Mr Byrne said.

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Bitcoin fitted that bill. "There are a lot of virtual currencies, but this is the only one I know of that can't be created," he said.

There are currently 12.15 million Bitcoins in circulation and when the supply reaches 21 million no more will be created.

Mr Byrne described himself as a "small 'l' libertarian" and an adherent of the Austrian School of economics, which predicted that fiat currencies – created for governments by central banks – would destabilize the world economy.

In the U.S., regulators are insisting that Bitcoin processors install anti-money laundering checks, but have otherwise suggested they are content to let the experiment continue.

Mr Byrne said that if Bitcoin derivatives exist when Overstock starts to accept the currency it would "bank" Bitcoin and use them to hedge the risk of changes in its value. If such derivatives do not exist, he said Overstock would trade Bitcoin into dollars every day.

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He said he did not own any Bitcoin, but did own gold. "I don't have any view right now on the value of Bitcoin versus dollars," he added.

He noted the currency's volatility and said: "That is going to happen for now. But once enough people are dealing with Bitcoins, the tide is going to turn and it will be just the opposite. It will be a currency that is stronger than government officials.

"But in the meantime it is going to be quite volatile and I am not making any bets one way or the other."